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Lockdown destroys new vehicle sales in April

However, there will be some recovery in May as local vehicle makers and motor dealers return to work

04 May 2020 - 17:56 David Furlonger

Picture: REUTERS

To no-one’s surprise, the bottom fell out of the new-vehicle market in April. Local sales collapsed 98.4% and exports 97.3% as Covid-19 lockdowns and economic distress destroyed demand, in SA as in the rest of the world.

There will be some recovery in May: local vehicle manufacturers and motor dealers returned to work on Monday, but no-one expects miracles.

The biggest benefit is likely to be to exports. The motor industry’s main argument in its demand to return to work, was that vehicle and components manufacturers could otherwise lose lucrative export contracts to foreign sister companies and competitors.

In April, most of those were also closed, as were most markets. However, with many parts of the northern hemisphere now starting to emerge from lockdown, the SA motor industry, which exports 64% of its vehicle production, also needs to get back in the game. To begin with, they are allowed to produce at only 50% capacity but they hope that will be enough for initial export demand.

The industry exported 901 vehicles in April: 19 cars, 880 bakkies and two trucks. In April 2019, the number was 32,829. In the first four months of this year, aggregate exports fell 35.6%, from 121,542 to 78,235.

Ford alone accounted for 304 sales — more than three times as many as second-placed Toyota’s 93, and the first time in decades, if ever, that one manufacturer has accounted for over 50% of the total monthly market.

By the end of April, the industry had sold 117,830 vehicles in SA – 31.2% fewer than the 171,243 at the same stage in 2019.

Although local motor dealers started opening for business on Monday, much of the day was spent waiting for clarity on what they were allowed to do. Regulations gazetted last Thursday permit only “car sales” and say these must take place “under specific directions”.

By late Monday afternoon, National Automobile Dealers Association chair Mark Dommisse said dealers were still waiting to hear what those directions were and whether they could sell not only cars, but also bakkies and bigger commercial vehicles.